Employment status, security, and the management of risk: a study of workers in Kwamsane, KwaZulu-Natal

Francie Lund and Cally Ardington

No 2, SALDRU Working Papers from Southern Africa Labour and Development Research Unit, University of Cape Town

Abstract: The study investigates the concept of security in relationship to work and employment. Work has conventionally been seen as the pathway to economic security; however, the growth in the numbers of people in the informal economy and in atypical forms of formal work has led to work being a source of risk and vulnerability for some categories of workers. We propose that security has separate components: income, health, education, employment and skill reproduction, place of work, demand, capital, and the ability to manage risk. We use eighteen indicators for the wage employed and six for the self-employed to estimate the extent of formality of employment, and use these to assess the components of work-related security for those in different employment statuses. This framework was applied to data collected in Kwamsane, KwaZulu-Natal in 2003. As expected, the self-employed were generally more vulnerable than those in wage employment, and there was clear gender segmentation in the labour market. However, differentiating the wage employed into three clusters based on the degree of formality of their employment revealed a more complex and nuanced picture. Those in the least formal wage employment were more vulnerable in a number of respects than the self-employed. The civil service was, as expected, an important source of secure employment, but this was especially important for women. The lower incomes of workers in the township Kwamsane compared to those who work in previously white small towns nearby is a clear indication of the continuing legacy of apartheid's racially based settlement patterns. Employment status determined access to risk management mechanisms such as savings and insurance; most of those with low incomes (both selfemployed and wage workers) tended not to have work related risk coverage and could not get services from formal or informal financial service providers. The study points to the methodological advantages of interviewing working people directly rather than relying on a knowledgeable household respondent, and to the analytical efficacy of identifying degrees of formality in employment. This was especially effective in exploring the middle range of the continuum between formality and informality

Date: 2006-08
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